PE­TER CHRISTO­PHER

An em­pha­sis on con­sol­i­da­tion while im­prov­ing pro­duc­tiv­i­ty is be­ing urged ahead of the gov­ern­ment’s Mid-Year Bud­get Re­view.

In re­sponse to ques­tions sent ahead of the pend­ing Mid-Year Bud­get Re­view, econ­o­mist and for­mer In­de­pen­dent Sen­a­tor Am­ri­ta De­onar­ine, us­ing da­ta pre­sent­ed in the re­cent­ly re­leased OECD-IDB Caribbean De­vel­op­ment Dy­nam­ics 2026 re­port, has sug­gest­ed that ex­pect­ed wind­falls be used to bol­ster the na­tion’s pro­duc­tiv­i­ty.

De­onar­ine said, “As Trinidad and To­ba­go ap­proach­es the FY2025/2026 mid-year bud­get re­view, the da­ta presents both chal­lenge and op­por­tu­ni­ty. The an­tic­i­pat­ed en­er­gy wind­fall cre­ates fis­cal and ex­ter­nal ac­count breath­ing room with ex­pec­ta­tions for cur­rent ac­count sur­plus­es widen­ing in 2026, while re­serves could sta­bilise or in­crease if the Cen­tral Bank ex­er­cis­es re­straint in in­ter­ven­tion.”

She con­tin­ued, “The ques­tion is whether this two to three year win­dow will be used to im­ple­ment the pro­duc­tiv­i­ty in­vest­ments, labour mar­ket for­mal­i­sa­tion ini­tia­tives, fis­cal con­sol­i­da­tion mea­sures, and for­eign ex­change regime re­forms that have elud­ed suc­ces­sive ad­min­is­tra­tions dur­ing pre­vi­ous en­er­gy booms, or whether the pat­tern of con­sum­ing wind­falls through cur­rent ex­pen­di­ture rather than struc­tur­al in­vest­ment will re­peat. “

De­onar­ine, of AM­RA Re­search & An­a­lyt­ics, not­ed that it was im­por­tant for the gov­ern­ment to con­sol­i­date, giv­en the eco­nom­ic con­di­tions, but at the same time stressed that there should be a path­way for growth.

She said, “First, fis­cal con­sol­i­da­tion is non-ne­go­tiable, but it must be high-qual­i­ty, not across-the-board cuts that de­stroy growth. Some high-qual­i­ty mea­sures in­clude - base-broad­en­ing VAT re­form, tar­get­ed sub­sidy re­moval, state en­ter­prise ra­tio­nal­i­sa­tion, and ex­pen­di­ture ef­fi­cien­cy.

“Sec­ond, pro­duc­tiv­i­ty sys­tems re­quire co­or­di­nat­ed ac­tion across in­fra­struc­ture, skills, in­no­va­tion ecosys­tems, and man­age­ment qual­i­ty. Iso­lat­ed work­force pro­grams and tax in­cen­tives will not suf­fice. The gov­ern­ment’s di­ver­si­fi­ca­tion agen­da, e.g. ship­build­ing, tech­nol­o­gy, re­new­able en­er­gy, avi­a­tion, tourism, needs in­sti­tu­tion­al ar­chi­tec­ture: sec­tor strate­gies that em­bed FDI with­in na­tion­al de­vel­op­ment plans, en­sure tech­nol­o­gy trans­fer, cre­ate link­ages with do­mes­tic firms, and build ab­sorp­tive ca­pac­i­ty,” she con­tin­ued.

The for­mer sen­a­tor al­so stressed, “Sta­tis­ti­cal in­de­pen­dence and trans­paren­cy are foun­da­tion­al. Trans­form­ing the Cen­tral Sta­tis­ti­cal Of­fice in­to an in­de­pen­dent Na­tion­al Sta­tis­ti­cal In­sti­tute is no longer a tech­no­crat­ic lux­u­ry; it is es­sen­tial for pol­i­cy cred­i­bil­i­ty, in­vestor con­fi­dence, and ev­i­dence-based de­ci­sion-mak­ing.”

The for­mer in­de­pen­dent sen­a­tor not­ed, “Fourth, im­ple­men­ta­tion trumps rhetoric. Rules-based fis­cal frame­works, as­set-li­a­bil­i­ty man­age­ment for the Her­itage and Sta­bil­i­sa­tion Fund, tax ad­min­is­tra­tion mod­erni­sa­tion, and mea­sur­able ac­count­abil­i­ty mech­a­nisms must re­place an­nounce­ments with im­ple­men­ta­tion. The de­ci­sion to strength­en the Board of In­land Rev­enue rather than cre­ate a new Rev­enue Au­thor­i­ty is de­fen­si­ble if ac­tu­al re­sources, staffing, mod­erni­sa­tion, and per­for­mance met­rics fol­low. In­sti­tu­tion­al la­bels mat­ter less than op­er­a­tional ef­fec­tive­ness. “

Mak­ing di­rect ref­er­ence to the re­port, De­onar­ine said the study of­fered ‘pow­er­ful lessons’.

She said, “The re­gion’s next de­vel­op­ment fron­tier is dis­ci­plined ex­e­cu­tion and mea­sur­able ac­count­abil­i­ty. For Trinidad and To­ba­go, this means con­fronting un­com­fort­able truths. We are not short on analy­sis. We are short on po­lit­i­cal will, in­sti­tu­tion­al ca­pac­i­ty and sus­tained com­mit­ment to ev­i­dence-based pol­i­cy­mak­ing. The win­dow for pol­i­cy cor­rec­tion re­mains open, but it is nar­row­ing rapid­ly. The un­for­tu­nate al­ter­na­tive to drift, pur­sue frag­ment­ed re­forms, and re­liance on com­mod­i­ty wind­falls is a path­way to cred­it down­grades, re­serve de­ple­tion, deep­er FX con­straints, and ul­ti­mate­ly, painful ex­ter­nal­ly im­posed ad­just­ment.

De­onar­ine al­so stat­ed it was cru­cial that the gov­ern­ment work on im­prov­ing for­eign di­rect in­vest­ment, an area which was flagged for its im­por­tance to re­gion­al de­vel­op­ment.

“The Caribbean Dy­nam­ics re­port re­veals a cru­cial find­ing: be­tween 2014 and 2024, 53 per cent of Trinidad and To­ba­go’s US$1.43 bil­lion in green­field FDI was di­rect­ed to­ward dig­i­tal ser­vices—com­put­er pro­gram­ming, in­for­ma­tion ser­vices, telecom­mu­ni­ca­tions, the sec­ond-high­est share in the Caribbean af­ter Do­mini­ca’s 61 per cent (pages 74-75),” she said, “The re­port em­pha­sizes that in­vest­ment in dig­i­tal in­fra­struc­ture cor­re­lates with high­er GDP and pro­duc­tiv­i­ty, with em­pir­i­cal ev­i­dence show­ing that a 10 per cent in­crease in broad­band pen­e­tra­tion can raise GDP per capi­ta by 1.4 per cent in de­vel­op­ing coun­tries. This sug­gests Trinidad and To­ba­go’s dig­i­tal FDI con­cen­tra­tion could be piv­otal for ac­cel­er­at­ing de­vel­op­ment, if ab­sorp­tive ca­pac­i­ty ex­ist­ed to con­vert for­eign cap­i­tal in­to pro­duc­tiv­i­ty trans­for­ma­tion.”

The econ­o­mist ac­knowl­edged the gov­ern­ment does have an “ am­bi­tious in­vest­ment agen­da via the Re­vi­tal­i­sa­tion blue­print”, which has re­ceived sig­nif­i­cant in­ter­est.

She said, “Ex­pres­sions of in­ter­est rep­re­sent pre­lim­i­nary en­gage­ment, but ac­tu­al in­vest­ment de­ploy­ment re­quires con­fi­dence in op­er­a­tional fun­da­men­tals. Re­cent da­ta on FDI from CBTT re­veals that Trinidad and To­ba­go has been ex­pe­ri­enc­ing soft for­eign di­rect in­vest­ment flows through 2023-2025. FDI weak­ness to date has been a key con­straint on the gov­ern­ment’s (past and cur­rent) di­ver­si­fi­ca­tion agen­das de­spite an­nounced strate­gies in­clud­ing tax re­forms, R&D in­cen­tives, fast-tracked work per­mits, and stream­lined prof­it rein­vest­ment poli­cies, SEZA (Spe­cial Eco­nom­ic Zones), etc.”

“The Caribbean Dy­nam­ics re­port al­lud­ed to this as net FDI in­flows in 2024 was -4 per cent of GDP. As a mat­ter of fact, be­fore FDI in­flows re­bound­ed to US$500 mil­lion in Q3 2025, cap­i­tal out­flows reached US$1.5 bil­lion in Q2 2025 alone,” said the econ­o­mist, “This rep­re­sents ac­tive dis­in­vest­ment dur­ing a pe­ri­od when the gov­ern­ment is try­ing to at­tract bil­lions in new FDI for the Re­vi­tal­i­sa­tion Blue­print, un­der­min­ing cred­i­bil­i­ty with po­ten­tial in­vestors who see ex­ist­ing par­tic­i­pants ex­it­ing,” she said.

De­onar­ine said while the Re­vi­tal­i­sa­tion Blue­print ar­tic­u­lates clear in­fra­struc­ture ob­jec­tives and of­fers var­i­ous in­vest­ment in­cen­tives, in­vestors have con­sis­tent­ly iden­ti­fied op­er­a­tional con­straints that af­fect de­ci­sion-mak­ing: for­eign ex­change al­lo­ca­tion process­es that cre­ate un­cer­tain­ty for prof­it repa­tri­a­tion; in­fra­struc­ture re­li­a­bil­i­ty con­cerns that in­flu­ence cost pro­jec­tions; and in­sti­tu­tion­al pre­dictabil­i­ty ques­tions re­flect­ed in cred­it rat­ing as­sess­ments. The crit­i­cal ques­tion is whether an­nounced in­ter­est trans­lates in­to com­mit­ted cap­i­tal.”

Ram­nar­ine: First Drag­on gas by ‘29

Tra­di­tion­al­ly, the en­er­gy sec­tor has been one of the ma­jor dri­vers of FDI. Re­cent­ly, En­er­gy Min­is­ter Dr. Roodal Mooni­lal has point­ed out the gov­ern­ment’s dri­ve to bol­ster gas pro­duc­tion, hail­ing progress on var­i­ous projects which are ex­pect­ed to dri­ve up re­turns in the short to medi­um term.

For­mer En­er­gy Min­is­ter Kevin Ram­nar­ine said de­spite progress, it is un­like­ly to im­pact the econ­o­my sig­nif­i­cant­ly be­fore late next year.

“I don’t see a turn­around start­ing in 2026, but by the end of 2027, we should start to see the im­pact of new projects such as Co­conut, Gin­ger and Man­a­tee. This au­gurs well for pro­duc­tion num­bers, which have been around 2.5 bil­lion cu­bic feet per day for the last three years,” said Ram­nar­ine, who gave an as­sess­ment of some named projects which po­ten­tial­ly could push pro­duc­tion in the next 18 months.

“Any nat­ur­al gas pro­duc­tion helps. Men­to and Cypre are al­ready in pro­duc­tion, but their vol­umes on­ly back­fill the de­clines from oth­er pro­duc­ing fields op­er­at­ed by EOG and BP. As for Ca­lyp­so, we don’t have a clear line of sight on that. I would like to see a time­line to first gas,” Ram­nar­ine added.

The past year has al­so seen the sign­ing of a ma­jor deep­wa­ter ex­plo­ration deal with US com­pa­ny Exxon­Mo­bil, while a change in lead­er­ship in Venezuela has opened the lane for the Drag­on gas field deal to be rene­go­ti­at­ed by Shell.

Ram­nar­ine was mea­sured on the po­ten­tial of both, and he said, “ I sus­pect the eco­nom­ics of deep­wa­ter nat­ur­al gas de­vel­op­ment in T&T re­main chal­leng­ing. If all goes to plan, I ex­pect Shell should get Drag­on to Fi­nal In­vest­ment De­ci­sion be­fore the end of 2026. If that hap­pens, we can see first gas in 2029. That is pos­i­tive, but I want to stress that this is im­port­ed nat­ur­al gas. So it means we will be­come an im­porter of nat­ur­al gas.”

While the promise of in­creased gas pro­duc­tion is pos­i­tive, the im­pact of the lim­it­ed sup­ply in was seen in the sec­tor, most no­tably in Point Lisas when Nu­trien tem­porar­i­ly halt­ed op­er­a­tions in Oc­to­ber, and sev­er­al oth­er com­pa­nies have fol­lowed suit due to gas sup­ply is­sues.

On that top­ic, Ram­nar­ine said, “The is­sues with Point Lisas are un­like­ly to be re­solved in the short term. If we get more nat­ur­al gas to the es­tate and that gas is com­pet­i­tive­ly priced, things can im­prove. The ba­sis on which Pt Lisas was pred­i­cat­ed has been flipped on its head with the phe­nom­e­nal rise of shale oil and gas in the USA. In West Texas, nat­ur­al gas prices are neg­a­tive at the mo­ment.“